Factors Setting the Tone for Pool Corp (POOL) Q2 Earnings

Pool Corporation POOL is scheduled to report second-quarter 2020 results on Jul 23, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 9.2%. Further, the company has a trailing four-quarter earnings surprise of 9.8%, on average.

How Are Estimates Faring?

The Zacks Consensus Estimate for second-quarter earnings is pegged at $3.09, indicating a decline of 4% from $3.22 registered in the year-ago quarter.

For revenues, the consensus mark stands at nearly $1,147 million, suggesting growth of 2.3% from the prior-year quarter’s figure.

Let’s analyze the factors that are likely to make an impact this earnings season.

Pool Corporation Price and EPS Surprise


Pool Corporation Price and EPS Surprise

Pool Corporation price-eps-surprise | Pool Corporation Quote

Factors at Play

Despite the coronavirus-induced lockdowns, Pool Corp has been seeing some positive trends in its business in the second quarter. On Apr 23, the company provided an operational update, whereby the sales trend improved during the latter part of the month. The company also said that sales in May were picking up on strong demand.

Moreover, increased usage of pools along with rise in demand for residential pool maintenance supplies, such as chemicals, and replacement products, such as pool heaters, pumps, cleaners, lights and filters, is likely to have driven the top line in the to-be reported quarter. Also, its foray into new locations along with the launch of innovative product categories is likely to have added to the upside.

However, higher labor and delivery costs as well as investments in information technology systems and hardware are likely to have bumped up expenses in the to-be-reported quarter. This along with pricing pressure from competitors to maintain sufficient cash flow is a potent headwind.

What Our Model Says

Our proven model predicts an earnings beat for Pool Corp this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. 

Earnings ESP: Pool Corp has an Earnings ESP of +6.88%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Brunswick Corporation BC has a Zacks Rank #1 and an Earnings ESP of +1.16%. 

YETI Holdings, Inc. YETI has a Zacks Rank #1 and an Earnings ESP of +19.79%.

Funko, Inc. FNKO has a Zacks Rank #2 and an Earnings ESP of +10.96%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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